As they have with the Great Depression, economic historians will argue for decades about the origins of our current crisis. But, surely, we can agree that the failure of international economic cooperation in the early 1930s—and worse, the sequential adoption of beggar-thy-neighbor domestic policies—made matters worse at a time when enlightened statesmanship could have made them better for everyone. Similarly, the current crisis is not just a U.S. problem or a European problem; it is a global problem that requires a coordinated global response. “We’re all in this together” is not a moral bromide, in this instance, but a simple statement of fact.
Since the crash of 2008, the entire world has relied on a shared, if tacit, plan to avert all-out catastrophe and a second Great Depression. The United States would do what was necessary to prevent its financial system from collapsing and stem the economic decline with massive fiscal and monetary stimulus. Europe would cauterize its debt crisis, which threatened the integrity of its common currency, by bailing out its small, insolvent countries (Ireland, Portugal, Greece) while relying on German growth and Franco-German leadership to pull it through. Brazil and India would continue to grow briskly, and China would shore up global demand with a huge investment in public sector spending. And the world would muddle through, albeit with below-normal growth and above-normal unemployment for an uncomfortably long time. In the interim, social safety nets of varying strength would shield the hardest-hit workers and families from destitution, maintaining social stability.
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